Gabino Diaz - Page 6
in the litigation. Coastal Petroleum Refiners, Inc. v.
Commissioner, 94 T.C. 685, 688-690 (1990).
Respondent’s position in a judicial proceeding is that which
is set forth in respondent’s answer to the petition. Sec.
7430(c)(7)(A); see Huffman v. Commissioner, 978 F.2d 1139, 1147-
1148 (9th Cir. 1992), affg. in part and revg. in part T.C. Memo.
1991-144; Maggie Mgmt. Co. v. Commissioner, supra at 442.
Respondent concedes that petitioner substantially prevailed
with respect to the amount in controversy and exhausted all
administrative remedies. Respondent argues, however, that
respondent’s position was substantially justified and that
therefore petitioner does not qualify as a prevailing party for
purposes of section 7430.
Relying on an unpublished opinion, McKee v. Commissioner,
209 Fed. Appx. 691 (9th Cir. 2006) (holding that respondent’s
position was not substantially justified where respondent
admitted that key errors were made in calculating the taxpayer’s
deficiency), revg. T.C. Memo. 2004-115, petitioner argues that
respondent’s position was not substantially justified.
We conclude that on the record before us respondent was
substantially justified in asserting in his answer that
petitioner’s claimed deductions were not substantiated. A number
of individuals in addition to petitioner were referenced on
checks and other documentation that were provided to respondent.
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Last modified: November 10, 2007